Awards for Excellence 2018
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A decade ago Bawag was on the brink of collapse. Many in the industry doubted its survival and would have laughed at the prospect of it surpassing the performance of all the other large Austrian lenders.
Today it is Austria’s most profitable bank, with a return on equity in the mid-teens, a cost-to-income ratio in the early forties and profits before tax that rose above half a billion euros in 2017. It is the deserved winner of this year’s award for western Europe’s best bank transformation.
After a recapitalization and purchase from the Austrian Trade Union Federation in 2007 by Cerberus and later GoldenTree, Bawag rapidly turned away from its previous focus on central and eastern Europe. It reformed governance and sold non-core holdings ranging from a piano maker, a television company and even a Palestinian casino. It also worked to integrate Bawag more closely with the former postal savings bank, PSK, with which it had merged in the early 2000s.
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| Anas Abuzaakouk, Bawag chief executive |
The culmination was Bawag’s sale of a 40% stake in an IPO in October last year – Austria’s largest-ever – which saw Cerberus’s stake drop to a minority. Bawag is already looking ahead to what it sees as a chance to take advantage of digitalization and regional banking consolidation, and to become more of a western European group.
Bawag first gained a reputation as a consolidator in Austria two years ago with the acquisition of building society start:bausparkasse, property financier Immo-Bank and the former leasing subsidiary of shuttered fellow Austrian lender Volksbanken. It also bought the Austrian card issuing business PayLife last year.
Now, with work to wind down its long-standing partnership with Austrian Post already underway, its established Austrian online lender Easybank is part of a strategy by chief executive Anas Abuzaakouk to leverage its acquisitions in Germany last year – Südwestbank and regional building society Deutsche Ring Bausparkasse.
